Lays Down Five Propositions

The chief justice says that tho historlcal olreumstanoes nttending tho (raming oí tho oonstitution must bo considered, and on tnis subject he quotes various authorities at length. Tiie Hilton case, wliich is a stronghold of thoso who favor the íncome tax law, is reterred to, and it ia declared that in that ca3e the suprema court distinctly avoided thoexpression of acomprehensive definition. The acts of July 14, 1818, and of Aur. 5, 18S1, are reviewed, alter uhich tho foüowing propositions ara lald down: "1. - That the distinction between direct and indirect taxaüon was well understood by the framors of the constitutiou aiid those who adopted it. "2 -That under the state systems ot taxa t ion all tïixes on real estáte or personal property or the rents or inccmea thereot were regarded as direct taxus. '3. - That the rules of apportioamont and of unlformity wero adopted in view ol that distinction and those systems. '4. - That uhether the tnx on carriaged was direct or indirect was disputed, bat the tax was sustained as a tax on the use and an excise. [It was the Lax on carriages that was In dispute in the Uilton case. ] "6 The.t the original expectation was that the power of direct taxatioa would be exerolsed ouly in extraorJinary exigencies, and down to Aug. 15, Ib94, this expectation has been walized. Tlie act of that date was passed in a timo of profound peace, and if we assume that no special exigemy oalled for unusual legislation, and that resort to this modo ot taxation is to becoino au ordinary and usual uieans of supply, that fact lurnishes mi additional reuson lor circumspecliou and care in disposing of the case." "This law taxes theinoome rocelvad from land and tho growth or prodaoe of tho land. Mr. Justice Paterson observad in Hilton's case: 'Land, independently ot' lts prodnets, is of no valué.' If by caliing a fax indirect when it is esBentially direct the rule of protectiou could lê fritteied away, ono of the groaïi landmarks defining the boundary between the natlou und tlu' atates of which ie is composed vould havo d.sappeared, and with it one of the bulwa-rka of private nghts and private property." Summing up the chief justice says amongother thilixs: "XtM requirement of the constitution is that no direct tax shiill bu laid otherwise than by apportionment. The prohibition is notagamst direct taxes on land, from which the implication is sought to be drawn that indirect taxes on land would ba unconstltutional, but it is against all direct taxes, and ic U adzuitted tiiat i tax on real tate Is a direct tax. Unless, therefore, a tnz upon reuts or tncomo Issatiis out of lands U intrinsically so diffarent frora a tax on the land itsolf that it belong8 to a wholly different clusa of tnxes, such taxes must be reg.irdod as falling within the same entejrory as tax on re;il estáte eo nomine." Comparatively brief spaco is devoted to the question of a tnx on tiie income deriveU from municipal bomls. 'The conslitution," saya tho opmion, "conteníplatos tho independent exiTcise by the u at Ion and the state, severaliy, of ou: oonstitutlonal powers. As the state cannot tnx the powers, tho operntions, or the property of tho United S:ates, nor the means which thoy cmploy to c;rry theii powers into execution, so it has heen helil that tho U.iited Staten have no poei under the constitutioii to tax either the instrumentalitiea or the pruporty of a stato. "A municipal Corporation is the representativo of the state and one of the instrumentalittes of the state government. It was long ago determinad that the property and revenues of municipal corporations aro not siibjects of federal taxation. The law under considei-atiou provides that 'nothing herein cont.iincd shall apply to states, counties, or municipalities.' It is contended that although the property or revenues of the states or theii instruraentulities cannot be tnxnl, nevertheless the income derived frora state, county, aud municipal Becurities con be taxed. "But we think the same want of power to tax the property or reveuues of the states or their instrumenta itics exista in relation to a tax on the inoomes from their securities and for the same renson, and that reason is given by Chief Justce Marshall in Weston vs. Charleston, whsre hesaid: 'The right totax tho contract to any extent when made must opérate on the power to barro w before it is exurcised and have a sensible lnfluenoe on the contract. The extent of thia power depemi9 on the will of a disiiuct government. To any extent, hoever incousiderable, it is a burthen on the opera tions of government. Ie may be cirried to an exteut which shall arrest them entiroly.' "